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Rentier Island

For decades, Britain's governments have designed public policy to benefit property owners and landlords to the detriment of everyone else – in effect, the UK is a housing market with an economy attached.

The government has this week, once again, extended the bailiff evictions ban in England. A recurrent pattern on the part of government in responding to this crisis has been an unwillingness to suspend market interactions until forced to do so: we have seen this most notably with the frequently disastrously late lockdowns – but it has also characterised the approach to renters’ rights.

Indeed, to look at the treatment of renters, even amidst the unfolding of a pandemic, is to gain a deep insight into the constellation of the UK’s – particularly England’s – contemporary political economy. A glance at the legislative record shows just how piecemeal and reactive the government’s approach has been.

At the end of March 2020, bailiff evictions were banned for three months. On June 5, this moratorium was extended for a further two months. In late June, the government confirmed that evictions would begin once again upon the cessation of the updated eviction ban – and then, 3 days before evictions could begin, towards the end of August, frantically postponed them for four weeks.

Having belatedly introduced a four-week lockdown in November, the government once again banned evictions until January 11 – as in August, they deigned to extend this ban a mere three days before it elapsed, this time postponing bailiff evictions for six weeks. Again, less than a week before this six week extension expired, the government once again introduced a six-week postponement to evictions: running to March 31. This leads us to where we are now: midway through March, yet another temporary elongation of the ban on bailiff evictions has been implemented.

While some may read all of the above through the prism of competence, it is more instructive to understand it as a consequence of the all-encompassing desire to get the housing market ‘moving’ again. This was being weighed up against the severe public health consequences of allowing evictions to take place amidst a pandemic.

That such a calculation should factor into decision-making should not surprise us. As an impressive select committee report on social housing published last year notes, the value of land in the UK corresponded, per 2016 data, to 51% of national net worth: twice that of Germany; significantly greater than the G7 average of 39%.

As I have noted elsewhere, it does increasingly feel as if the UK can at least partially be understood as a housing market with other parts of a modern economy attached to it. Such a frame helps explain the government’s unwillingness to make commensurate changes to protect renters for the duration of the crisis: instead repeatedly, belatedly, extending bailiff eviction bans to the tune of a number of weeks or months.

A Housing Market with an Economy Attached

This is because, in the context particularly of England’s rental market, a return to normality – a return to the market functioning properly – is by definition a return to the situation whereby landlords can boot out tenants near enough at will, raise rents as they see fit, and rely on the state to steadfastly defend their interests.

This is itself symptomatic of wider structural issues in the UK: the near total absence of meaningful institutional support for renters; a political economy increasingly defined by rentierisation; and the successful creation of a class of asset-owners whose wealth appears inextricably linked with the maintenance of Conservative control at Westminster. As perverse as it sounds, in the economy Thatcherism built, if your landlord can’t kick you out, the rental market is failing.

What little financial support has been offered to tenants throughout this crisis has come in the form of an uplift to Local Housing Allowance – the subset of the welfare system designed to help cover private rental payments – to 30% of local rents. What this effectively means is that, in any given area, the LHA rate will cover the cheapest 30% of properties.

While the government has been at pains to celebrate the apparent generosity of this measure, recent history paints a different picture. When first introduced in 2008, LHA covered 50% of market rent. An early victim of Osbornomics, LHA was reduced to 30% in 2011, decoupled from local rents in 2012, then frozen for four years between 2016 and 2020. Indeed, Rishi Sunak’s November spending review reintroduced a freeze to Local Housing Allowance, which means it will once again cover less and less of people’s rental costs.

At the same time, myriad measures have been undertaken to loosen up the housing market: most notably a stamp duty cut – extended in the recent Budget – and the rolling-out of a government-backed 95% mortgage guarantee scheme. This follows on from the plans announced last summer in the midst of the pandemic to massively deregulate the planning system. Perhaps unsurprisingly, research undertaken by IPPR last year showed the extent to which government support measures overwhelmingly benefitted landlords and banks.

The scale of the housing crisis in the UK is unignorable: yet any measures to meaningfully address it will have to grapple with the legacy of Thatcherism. The Conservatives are in a conjuncture of their own making that they are – by definition – unable to grapple with. As such, and as Nick Bano recently discussed in this magazine, their strategy is to simply ‘keep the housing casino rolling’.

The Market Knows Best

From Thatcher onwards, they have presided over the decimation of social housing, the weakening of renters’ rights, and the subsequent shift towards a subsidisation model: with the state paying landlords to house people, rather than building houses – and therefore owning assets – with which to house the population, as the figure below shows:

So vast has been the change in the political economy of housing since Thatcher – the last piece of legislation enacting rent controls in England was passed in 1977 – that a similarly bold structural shift is needed now to reset the balance. As Jim Pickard of the Financial Times has noted, ‘almost half of UK homeowners’ housing wealth is concentrated in the hands of the over-65s.’

This is unsurprising: the UK is something of an exemplar in what is known as ‘asset-based welfare’ – as the state steps back from its role in meeting social needs, the impetus is placed on individuals to invest in assets which will appreciate and afford them the capital to meet these needs at the individual rather than the collective level.

Housing is just such an asset, but the nature of housing means this approach cannot be replicated by subsequent generations: as with Right-to-Buy itself, this model is something of a one-time-only offer; one that benefits a certain age cohort (although the degree to which they benefit from having to, for example, sell their homes to receive care is certainly questionable) whilst barring those following them from accessing stable housing.

Emergent Tory Strategy

While rent controls are instinctively popular – and should be supported as an interim measure – there is no fix to the spatial and social problems caused by the housing crisis in the UK that does not also tackle ownership.

The Conservatives clearly have no interest in this, but the contours of their emerging strategy could nevertheless succeed electorally. All signs point to an attempt to keep the housing show on the road while deregulating housing construction in geographically confined areas so as to create a kind of alternate market. In the plans advanced by the government, certain areas will be protected – while ‘growth’ areas will be effectively a free-for-all for construction.

Coupled to the 95% mortgage schemes – unlikely to help ‘Generation Rent’ in any significant way – their solution is to win the support of sections of the younger cohort, or their grateful parents, by setting in train the physical and financial infrastructure that would allow, for example, a couple on median incomes to afford a flat in a converted office block.

In other words, utilising a delineated deregulation model to give the security of tenure afforded by home-owning, albeit in smaller, substandard accommodation, to a select few younger people, while keeping house prices rocketing in the leafy shires.

This could work because of the sheer desperation of many tenants. Renting in the UK – especially England – is precarious and poorly regulated. It is more expensive than paying for a mortgage, with a higher proportion of poor quality properties. It is not a coincidence or a sign of incompetence that renters have been an afterthought throughout this pandemic. It is a structural part of our political economy.

Tenants’ standing orders, direct debits, stolen deposits, and entrapment within the private rental sector are a constituent part of the dynamics of contemporary British capitalism – a lubricant to expanding financialisaton and commodification – but their political representation is entirely subsidiary. Labour, which ought to be seeking to expand this coalition of young renters, instead appears intent on alienating it.

As Tom Lavin noted last year in an excellent piece for Greater Manchester Housing Action, new leadership Labour moved quickly to water down its proposed protections for renters in the pandemic: from rent suspension to rent deferral. For context – estimates suggest there are now between 500,000 and close to 1 million renters in arrears.

Successfully formulating a strategy of triangulation between groups whose interests are rendered necessarily oppositional by the nature of Britain’s political economy – in this case tenants and landlords – was always a tall order.

Against a ruthless Conservative government happy to deregulate in the cities and protect their propertied coalition in the shires, it looks like a hopelessly managerial attempt to bridge irreconcilable divides; divides that the pandemic – and the government’s response to it – has left starkly exposed.